Enel says 2 binding bids received for Slovakia's Slovenske Elektrarne

By bne IntelliNews May 11, 2015

bne IntelliNews -


Enel said on May 8 it has received binding bids for its 66% stake in Slovak electricity producer Slovenske Elektrarne (SE). However, under pressure from Bratislava, the Italian utility seems to have given up on hopes of exiting the company immediately.

Having put its stake in SE up for sale last summer, Enel had imposed a deadline of May 9 for final bids for Slovakia's dominant power company. However, with the state saying it wants to increase its 34% stake to a majority, the Italian company said in late April that it now plans to sell its Slovak assets in two tranches.

Binding bids were placed by Czech energy group EPH and a Hungarian consortium made up of MVM and MOL, Reuters reports. The bids for SE, which has an equity value of around €750mn according to CEO Francesco Starace, were submitted on May 7.

Finland's Fortum had previously also expressed an interest, while Czech energy group CEZ, which had long has been seen as the leading suitor for the stake, announced on May 7 it would not submit a bid after Bratislava had threatened to block any sale before the Italian company finishes the two new reactors it is building at the Mochovce nuclear power plant.

Starace reiterated that the sale process could now be divided into two phases. Part of the stake would be sold to the Slovak government first, with the rest offloaded to private investors at a later date. "It's in the best interest of all parties that Enel steps out partially but remains a shareholder for the time being," Starace said.

The Italian CEO raised for the first time the possibility of selling the 66% stake in tranches at the end of April after a meeting with Slovak Prime Minister Robert Fico. That followed a prolonged campaign from the government that included police raids and compensation demands. Slovakia plans to buy enough shares to regain a majority, while Enel would remain a minority shareholder until the new units at Mochovce are completed.

Bratislava has been arguing with Enel over the unfinished nuclear project for years, and Starace suggested that is the biggest factor which is affecting the price of its stake in SE. However, Fico has also made it clear recently that he wants to boost the state's position in the company. 

The bid from EPH, which is seen as a potential ally of the Slovak government, was expected as the company had previously stated it is not giving up its interest in the Slovak company. "EPH seeks to verify if it is possible to find a solution that would be in the interests of Slovakia and Enel and in which EPH could play a meaningful role," the company said in April.

EPH, controlled by closely-held Slovak financial group J&T, is well versed in working closely with Fico's government. In 2013 it bought EDF Suez and E.ON out of their 49% stake in Slovak gas utility and pipeline operator SPP.

In that sale the Slovak government also put bidders off as it pushed - but failed - to remove the privatisation stipulation handing management control to the minority owner. Last summer, Bratislava bought EPH out of the loss-making gas sales unit of SPP, leaving the Czech-based company with the lucrative distribution and transmission parts of the business. 

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